How Is the Insurance Fund Typically Capitalized and Replenished?

The fund is primarily capitalized by the residual margin left over from liquidated positions that were closed at a better price than the bankruptcy price. When a position is liquidated, the exchange attempts to close it.

If the position is closed profitably (above the bankruptcy price), the surplus is routed to the insurance fund. It may also receive a small portion of trading fees or liquidation fees.